Broadridge to Yahoo: Oops, We Added Wrong (and Shareholders Like You Lots Less)!
Here’s the full statement (below) from the outside firm, Broadridge Financial Solutions, that tabulated Yahoo’s recent shareholder vote.
Bottom line: An underreporting of shares withheld for certain directors, which the Lake Success, N.Y., shareholder services firm is calling an “isolated incident” and also a “truncation error.”
That sounds painful.
And it is likely Yahoo CEO Jerry Yang will feel much of that pain, as sources said the shares are largely those that were withheld from him by disgruntled shareholders.
While the mistake will not change the vote’s overall outcome, in which all current Yahoo (YHOO) directors were re-elected, it will surely make the no-vote tally worse than first reported for many directors, and underline more clearly the increased investor disappointment directed at Yahoo leadership.
As reported Friday, for example, Yang only had 14.6 percent withheld, with 85.4 percent voting for him, which was better than the year before.
A Yahoo spokesman said the company was redoing its results, based on the new information, and would release the new numbers soon. The Internet company did not do the vote tabulation.
The examination of the results was prompted by an unusually positive Yahoo shareholder vote, when it did not seem to include the withheld votes of one major Yahoo shareholder.
Thus, Capital Research & Management asked Broadridge for a recount of its votes.
The problem centered on how shares were tallied in the Yahoo annual meeting, specifically related to a group of votes withheld by Capital Research Global Investors.
That fund owns almost seven percent of Yahoo, and its head, Gordon Crawford, had recommended withholding votes from Yahoo.
Here is the statement from Chuck Callan, Senior Vice President Regulatory Affairs at Broadridge:
On August 4, Broadridge was notified by an investor of a potential discrepancy in a reported vote at the Yahoo Annual Meeting on August 1.
Upon review, it was determined that there was a truncation error in the final printout sent to the tabulator. This resulted in the underreporting of shares withheld for certain directors.
This error did not change the outcome of the election of directors, and was determined to be an isolated incident.
Broadridge has determined that the situation was unique–a truncation error occurred when shares withheld for a specific director in a specific nominee exceeded 8 digits and were reported to the tabulator in paper format. Broadridge has fixed the problem. Further, Broadridge has verified that over the past 18 months there were no other meetings with reports that included this unique combination of factors. The review is ongoing for meetings occurring before then.
On August 4th Broadridge notified Yahoo’s Inspector of Elections and Tabulator of the problem, and a revised report was issued on August 5th.